POLOKWANE – This development followed after the construction company was recently placed under business rescue after the construction division has been experiencing cash flow difficulties emanating from, among other reasons, mismatched cash inflows and outflows for some time.
Sanral creates jobs for local builders and labourers
Acting CEO, Khathutshelo Mapasa, in March told the media the company had entered into some construction projects it should not have done.
He said increased competition, poor contract margins and low infrastructure spend were factors playing a part in the company’s distressing condition and that growth in the construction industry had tapered off to below inflation in a very competitive market.
The company has been in the construction industry for more than 60 years and endeavoured to raise bridge funding from a consortium of lenders for the finalisation of construction contracts against the provision of security, pending anticipated cash inflows to be sourced from the disposal of non-core assets, finalisation of various contracts and the successful implementation of various operational action steps.
Following protracted negotiations with a consortium of lenders, the company was advised in mid-June that the majority of the consortium of lenders were not prepared to make bridge funding available to Basil Read in an informal process outside of business rescue.
The company has thus commenced with voluntary business rescue proceedings as provided for by section 129 of the Companies Act.
Basil Read has appointed Siviwe Dongwana of Adamantem Chartered Accountants and Matuson and Associates as business rescue practitioners.
Business practitioner Rob Jenkins, attached to Matuson Associates, said a turnaround plan for Basil Read would be released by July 20 to creditors and refused to comment further.
According to reports, the company would sell its non-core assets including land it owned.
Two Basil Read contractors, who spoke with Review on the basis of anonymity, said they could take their equipment and leave the project, but they are still owed a lot of money for services rendered and are awaiting the business rescue plan. One of the contractors said a lot is depending on the consortium of lenders and if they will make the promised money available since the company now is under business rescue and they are awaiting the proposed business rescue plan.
